No quick fix for labour crunch: CAPP

No quick fix for labour crunch: CAPP

Wage inflation and labour shortages could derail or even lead to the cancellation of some energy projects, David Collyer, president of the Canadian Association of Petroleum Producers, tells FP Energy editor Yadullah Hussain. An edited version of their conversation is below:

Q How can we solve the labour shortage problem?A There is no quick, easy fix. Immigration has been the focus of some of the short-term action and I give the federal government credit for moving on that dimension of this file. They have done some things with respect to temporary foreign workers and they are looking at the overall immigration mix to ensure that immigration to Canada is more targeted to the necessary skill sets. But that’s only one dimension of the longer-term solution.

Q What would you propose?A The kinds of things we are looking at is part of a broader plan. We have to ensure there is priority for jobs for Canadians. That means attracting people into trades and disciplines and universities and colleges that are relevant to our industry. It means making sure we have the right resources available for training and development. [It is also] a big opportunity to get groups that are currently under-represented in the workforce engaged, Aboriginals being the most obvious one.

Also, how do we keep people in the workforce longer? We have an aging population that has a lot of expertise and capable of mentoring people. How do we provide the incentives to keep those people in the workforce rather than retire?

Labour mobility is a challenge…. And we have to think about other dimensions of the solution: improving productivity, the application of technology and other initiatives. We are not going to be able to solve the problem entirely by bringing more people to the equation.

A lot of good work has been done and is being done both in the private sector and the government, but I would observe that I don’t think at this point we have a broad strategy or plan developed to the degree it needs to be developed. Nor, probably, the overall sense of urgency that we need collectively to deal with this. Although I think it is coming, we are not there yet. And CAPP’s doing some work with other industry associations and governments to try and put together a broader plan or framework to deal with this issue.

Q Are you expecting a broad policy framework from the federal government on labour challenges?
A We are working with Alberta government and some of the other western provinces. We are also engaged with the federal government now, whether in the end that takes the form of a broad plan, or whether it gets more focused on specific initiatives and activities that need to be undertaken.

Q Could wage inflation derail projects?A It will be one of the reasons. There is no question that as time goes on and we look at more projects not only in our sector but others too, [wage inflation] probably becomes more pronounced. There are two ways that it manifests itself: One, if you have a less-trained workforce productivity goes down, which means costs go up. And the other is you have the potential for projects to get delayed or potentially cancelled if you haven’t got enough workers available to bring those projects forward. It has the potential to contribute to cost escalation and that’s what we are trying to mitigate.

Q Many young people are wary of the industry’s impact on the environment. How is that affecting recruitment initiatives?
A The industry brand is important with respect to public policy and broad public perceptions of the industry. And we have put a lot of effort into that over the last few years. The reality is it influences how younger people perceive the industry as a place to work. For a while there was the notion that it is a ‘‘sunset’’ industry ­— that the opportunity was not there longer term. I think that’s proven to be incorrect.

But there is also the issue of how our environmental performance and social performance is perceived and particularly perceived by younger people who are looking at what they might want to do for a career. Part of what we need to do as an industry is engage those people and go to high school and people in universities who are currently contemplating career choices.

Q Do you think the U.S. energy boom is leading to a brain drain?
A There has always been a fair amount of cross-border mobility and we continue to see that. The greatest opportunity is for skilled tradespeople in the U.S. to come to Canada to work on the oil sands and other projects. The building trades unemployment rate in the U.S. was about 30%. There are a lot of very well-qualified and well-trained people in the U.S. with credentials which are easily transferable in Canada. It can’t be at the expense of bringing opportunity to Canadians, but given the demand we have, it is an opportunity for us.